William Perry

It is bad enough that consumer behavior is never 100 percent predictable, but the unpredictable behavior of management also compounds forecasting errors.  Over the years I have relived the following situation so much that it has almost become a predictable behavior.

Once a month, among my many forecasts, I submit a 30/60/90 day outlook for the upcoming period.  If the forecast shows the hotel performing below our annual budget, the boss visits each sales manager and demands they not lose a single sale and suddenly everything is open for negotiation.  Then after the 30 days pass, our numbers actually come in much higher than forecasted.  Conversely, if I submit a forecast that shows the operation performing better than budget, the boss is on the golf course, sales people leave half an hour early everyday, and everyone sits back waiting for the money to come rolling in.  After these 30 days pass, our actual sales numbers come in close to budget or a little less.  In both situations, I get grief and am told I don’t know how to forecast.  However, the one variable that is continuously changing is the behavior of the boss based on my original forecast.

For a number of years I repeated this pattern getting mentally bruised without fully understanding how management behavior was influencing my forecasting accuracy.  Last March, when I returned to Hilton, I had a conversation with my boss explaining how his behavior was a variable in my forecast and encouraged him to be as consistent as possible in his management style.  In other words, after explaining the cycle described above, the light went on and he understands how is role can influence the forecast.

While my margin of error is still in the 1-3 percent range, at least his behavior is one less variable of concern.  Forecasters that have emotional managers, influenced by the numbers, should recognize this behavior and encourage a dialog to help managers understand how their behavior may be influencing the actual results versus the forecast.

William Perry, Jr.
Director of Revenue Management
Hilton

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